Friday morning in Asia, the yen weakened slightly against its major counterparts after surging up yesterday on growing concerns over the global economy.
The unexpected rise in U.S. jobless benefit claims and growing fears about the sovereign debt crisis in Greece and other parts of Europe pushed the yen up sharply yesterday.
Most Asian stocks slumped today as Wall Street tumbled overnight on disappointing jobs data and escalating debt jitters in Europe.
Japan’s Nikkei 225 index is currently trading at 10,062.65, down 293.33 points or 2.8% from its previous close.
The yen weakened against the US dollar in early Asian deals on Friday. As of now, the yen is worth 89.77 per dollar with 91.3 seen as the next target downside target level. At yesterday’s close, the dollar-yen pair was quoted at 88.95.
During early Asian deals on Friday, the yen slipped against its U.K. and Swiss counterparts. At present, the yen is trading at 141.3 against the pound and 84.1 against the franc, compared to yesterday’s close of 140.21 and 83.41, respectively. If the yen drops further, it may target 86.25 against the franc and 145.25 against the pound.
Yesterday, the Bank of England halted its GBP 200 billion bond purchase programme and retained its key interest rate at 0.5% as policy makers assured these measures would continue to impart a substantial monetary stimulus to the sluggish UK economy for some time to come.
The yen declined against the euro during early Asian trading on Friday and hit a low of 123.22 at 7:15 pm ET. The yen attempted to reverse its direction thereafter, but pulled back again shortly and the pair is currently worth 123.0. The next downside target level for the yen is seen at 127.0. The euro-yen pair closed Thursday’s deals at 122.10.
The recovery process in the Eurozone economy is likely to be uneven, European Central Bank President Jean-Claude Trichet said yesterday, after the central bank retained key interest rate at a record low of 1%.
In his introductory statement, Trichet said this outlook remains subject to uncertainty. The outcome of the monetary analysis confirms the assessment of low inflationary pressure over the medium term, he added.
In early Asian trading on Friday, the yen dropped to 61.90 against the NZ dollar, 83.75 against the Canadian dollar and 77.96 against the Australian dollar. If the yen slips further, it may target 64.7 against the kiwi, 86.15 against the loonie and 81.1 against the aussie. The kiwi-yen pair closed trading at 61.17 on Friday, loonie-yen pair at 82.84 and the aussie-yen pair at 76.96.
The Reserve Bank of Australia is predicting modest increases in inflation and gross domestic product, along with a moderation in joblessness. The RBA issued its quarterly Monetary Policy Statement today in Sydney, saying that if the forecasts materialize, more interest rate hikes are possible.
Looking ahead, Japan will release its preliminary leading and coincident indexes for December at 12:00 am ET.
In the European session, the French trade balance and the German industrial production for December, U.K. PPI and the Italian CPI for January are expected.
The Canadian and the U.S. unemployment reports are likely to influence markets at 7:00 am ET and 8:30 am ET, respectively.